Return of the Triple-Net Flip in Oklahoma Real Estate?

Article excerpt

Construction industry supplier RSC Equipment Rental has opened a 5,940-square-foot full-service shop in Sand Springs, built on 2.2 acres by Embree Construction of Georgetown, Texas.

Sister company Embree Group just brokered the $2.2 million sale of that metal building to Jack B. Zelinger and Shirley A. Francis, according to Tulsa County Courthouse records. Embree broker Rocky Hardin handled the transaction for RS-Sand Springs OK-1 LP.

That deal by Embree, one of several developers used by RSC to handle store expansions, points to one of the last thriving examples of building and flipping properties under triple-net leases. Many retailers that charted such growth in Oklahoma, such as Alliance Auto Parts, have reined those efforts back under the nation's credit crunch.

"There are still people looking for investment properties but it definitely still is a challenge right now," said Mendy Parrish, a retail broker with CB Richard Ellis of Oklahoma. "It used to be a triple-net deal would come out and they almost didn't have to advertise. Now you're seeing more and more of them actively marketing them."

This 8200 W. Charles Page Blvd. property boasts a 10-year lease as RSC Store 337, its estimated rental revenue leading to its $2.26 million asking price.

While Embree offers several such RSC stores for sale on its Web site, with 10 or more built this year, Hardin said this represented its first venture in Oklahoma. Hardin expects Scottsdale, Ariz.- based RSC to request five or more shops built in 2009, with some bringing an anticipated return to the Sooner State.

"That we don't know," he said of the projected number, explaining how RSC uses several developers in Oklahoma. "They usually call us up and say, 'We need something in this area. Go find us something.'"

Such anticipated expansion may reflect strategies drawn before October's financial meltdown.

Daniel Looper, manager of the new Sand Springs store, said RSC could add up to 10 stores in Oklahoma next year, following a 2008 expansion effort that brought the state's inventory to 15 locations, with one still under construction in Oklahoma City. …